Goldman Sachs’ M&A Boom, Trading Strength Lift Q1 Revenue – But Higher Credit Costs Spook Retail Investors

• First-quarter net revenues climbed 14% to $17.23 billion while earnings rose to $17.55 per share from $14.12.
• Global Banking & Markets revenue rose 19% to $12.74 billion, driven by a 48% surge in investment banking fees on strong M&A activity.
• Provision for credit losses increased 10% to $315 million, primarily due to impairments related to wholesale loans.

Goldman Sachs (GS) delivered a strong first-quarter performance, with net revenues rising 14% year over year to $17.23 billion, driven by solid growth in its Global Banking & Markets unit and strength in equities financing.

Diluted earnings per share (EPS) for the first quarter (Q1) rose to $17.55 from $14.12 a year earlier, with both revenue and profit topping Wall Street expectations, according to Fiscal.ai data.

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Meanwhile, Chairman and CEO David Solomon highlighted the bank’s strong performance despite a volatile market, stressing the importance of disciplined risk management amid a “very complex geopolitical landscape.”

Despite the beat, GS shares were down more than 4% in pre-market trading on Monday.

M&A Activities Drive Core Segment

Revenue in its core segment, Global Banking & Markets, climbed 19% to $12.74 billion, supported by a sharp 48% jump in investment banking fees amid a surge in mergers and acquisitions (M&A) activities.

Equities revenue came in at $5.33 billion, marking a 27% increase, fueled by strong gains in financing, especially prime services, and improved trading performance, with higher intermediation revenues led by gains in cash equity products.

Fixed Income, Currency and Commodities (FICC) net revenues fell 10% to $4.01 billion, mainly due to weaker trading in interest rate products, mortgages, and credit. This decline was partly offset by stronger performance in commodities and currencies.

Provision for credit losses increased 10% to $315 million, primarily due to growth and impairments related to wholesale loans. Goldman Sachs had declared a dividend of $4.50 per share on Friday. The dividend will be paid out on June 29, 2026.

How Did Retail Traders React?

Despite the pre-market slide, retail sentiment on Stocktwits turned ‘bullish’ from ‘neutral’ a day earlier, amid ‘high’ message volumes.

One user said the bank should have capitalized more on volatility.

Another user called the higher provisions a “bad sign.”

GS shares have gained more than 85% over the past year.

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